#personal finances

I have done a 3.5 year vocational training (so I’m qualified to work as a professional handyperson) and I do have savings

But I do not have the slightest idea how to budget household money

I got a student loan of 450€/mo and my parents said they will give me 200€/month for groceries/ food

I DO NOT intend to start a part-time job until at least my 3rd semester! I have been out of school too long and need to focus so I don’t fuck up college

So my starting budget is 650€/month from which I have to pay

rent & utilities,

insurances (household, liability, casualty, some private health insurances),

groceries,

Plus a small amount each month I need to put aside in case I have to buy additional books, stationary, new everyday-shoes or generally in case I have to replace stuff that gets broken/ used up

Can anyone help me how to keep track of my finances and how to budget when I barely have enough money to cover overheads/ necessities?

Honestly I feel genuinely bad asking for help, especially since I know I have more savings to my name than many people my age probably have. But also, my parents never budgeted – at least not in a way they can teach me how to

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Combined with the following ask:

Hi Mr. ENTJ, I was wondering if you'd be open to sharing how you think about long term wealth accumulation (or if you could recommend books you've found helpful.) I'm in my early 20's, starting to plan for the long term, and am bumping into a problem I think would be common for ENTJ's - I'd like to have total control over my financial future, but any approach that is more than keeping money in a bank account has risk outside of my control and I'm not sure how to think about balancing that.

Related answers:

Hi Mr-entj. Do you have any advice for becoming more financially literate?

General money management advice

Hi Mr. ENTJ. When it comes to wealth, what is your relationship with and perspective on money? 

Do you have any entries on your blog that covers student loans and how to approach them for someone who is nervous about debt? Thank you!

Sure. I shifted my way of thinking from chasing salary to building equity.

The majority of people in this world are conditioned to think of money measured in the number of hours worked. For example: “My wage is $10 an hour so if I work 8 hours, I’ll make $80! If I work 0 hours today, I’ll make $0.” This mentality will result in working your entire life because the only valuable thing you have to trade for money is your time.

Start thinking about equity, ways to make money and grow wealth that don’t require your time, energy, or presence. This is important because your body will break down and your mind will get slower with age, you won’t always have the same earning potential. I invest in things like:

Bonds (low risk)

Precious metals (low risk) - Gold ingots especially

Property (lower risk) - My brother and I have property in tourist destinations that we can rent out, Airbnb, or use for family

Index/mutual funds (lower risk) - VOO, VTI, VFIFX, VTIAX

Stocks (higher risk) - FANG (Facebook, Amazon, Netflix, Google)

Businesses (high risk) - None at the moment

Whether or not I come to work today, I’m making money because I have assets that appreciate and accumulate interest while I’m relaxing in my pajamas watching Game of Thrones. Money that isn’t being used to pay bills should be invested or placed in a high-interest savings account because it’ll lose value over time.

A common complaint I hear is: “How the hell am I supposed to invest in any of that stuff without money?! I’m already struggling every day trying to make ends meet.”

Here’s how I did it:

Step 1: Stop complaining and feeling sorry about your situation. No one cares that you’re poor. Most people in this world have money problems and almost half this planet– 3 billion people– live on less than $2.50 USD per day. Bitterness, resentment, and self-pity are the ultimate barriers to improvement and prosperity. Fix your mindset before you can fix your financial situation.

Step 2: Get financially literate quickly, swiftly, rapidly, speedily, expeditiously, immediately. I did a ton of self-research, consulted with money managers, listened to advice from seasoned investors, and through trial and error developed a money management system that worked best for me. I grew up very poor and quickly learned that I had to seek out this information myself. If you’re poor due to the family you’re born in, don’t depend on the adults around you to teach you financial literacy because the odds are these people have no idea what the hell they’re doing with money either. It’s a mistake to automatically assume our parents, uncles, aunts, and grandparents know better than us. Be proactive.

Step 3: Make money. In the digital age, you can literally go to Google and type in “HIGHEST PAYING PROFESSIONS” and get a million results within seconds. It’s not rocket science to understand that some jobs pay more than others and to learn the paths required to get to them. A huge part of making money was getting my education right– I didn’t screw around in school and I didn’t waste time because I wanted to put myself in the absolute best position to quickly solve this problem.

Step 4: Live within your means and get some self-esteem. Bad money choices are often influenced by social pressures to “keep up appearances.” Stop wasting money on unnecessary things you don’t need like oversized apartments, designer clothing, eating out, the newest electronics, etc. Remember that you’re a miracle of life, a combination of trillions of cells coming together to produce a living and breathing human being, and whose purpose on this planet is far greater than to waste time, money, and effort to impress other people.

Once financially stable, feel free to start buying what you want but until achieving financial independence and financial security funnel that money into step 5.

Step 5: Invest in yourself; invest in your education, learn a trade, and acquire skills that will make you desirable in the work force. This will generate income. There are trade programs, scholarships for low-income students, and flexible + affordable educational options like community colleges, coding boot camps, and online programs to complement a working schedule. I worked during college and only quit my job once I received a full scholarship to a top public university in California.